Rupee at nine-month high - Securities dip
Mumbai: The rupee ended at a nine-month high on the last day of 2004, appreciating to close 26 paise higher at 43.47/48 against the dollar against its previous close at 43.73/74.

Forwards Market: The six-month premium closed at 1.72 per cent (1.85 per cent) while the one-year forward ended at 1.31 per cent (1.40 per cent).

G-Secs: The 7.38 per cent paper ended at Rs105.45 at a yield of 6.65 per cent. The 7.55 per cent 2010 paper fell 80 paise from the intra-day peak levels to end at Rs104.60 at a yield of 6.52 per cent.
Call Rates: Soft towards the end of trading at 3 per cent after opening close to the 6 per cent level.

CBLO Markets: volumes reached their highest level to Rs7,068 crore as 155 trades were conducted.
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ECBs form thirty two per cent of forex inflows
Mumbai: External commercial borrowings (ECBs) were one of the main sources of Forex inflows, contributing 31.8 per cent towards India's foreign exchange reserves during the April-September 2004 period. They contributed $2.1 billion ($0.2 billion) to foreign exchange reserves during the first six months of the current fiscal.

Total accretion for the first half period was $6.9 billion taking the reserves (excluding valuation changes) to $119.6 billion at the end of September.

India held the sixth largest stock of reserves in the world, the Reserve Bank of India said on Friday.

According to RBI, major sources of accretion to foreign exchange reserves during April-September 2004 were foreign investment, external commercial borrowings, external assistance and short-term credit. Other items under capital account which mainly reflect the difference between customs data on imports/exports and banking channel data, rupee debt service and other transactions, accounted for 40.9 per cent.

However, these accretions to the reserves were partly counterbalanced by a current account deficit of $3.3 billion, net outflows under NRI deposits at $1.3 billion and a valuation loss of $0.2 billion.

While the RBI denominates its forex reserves in terms of US dollars, these comprise a basket of major international currencies. Accordingly, when non-US dollar currencies depreciate vis-à-vis the US dollar, there is erosion to reserves by way of valuation loss. The reverse is the case when these currencies appreciate against the US dollar.
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NHB loan at five per cent for tsunami victims
Mumbai: The National Housing Bank (NHB) will extend refinance to banks and housing finance companies at a concessional rate of 5 per cent against loans provided to individual borrowers affected by the Tsunami tragedy. The banks and HFCs in their turn would not charge interest higher than 6.5 per cent from ultimate borrowers, said a news release from NHB today.

This is part of a concessional scheme from NHB providing financial assistance to the people in the tidal waves-affected States in the country.

NHB will also extend project finance to public agencies such as housing boards, development authorities, municipal corporations, slum clearance boards and other similar institutions at a concessional rate of 5.5 per cent. The loans are to be extended for 15 years including two years of moratorium on payment of principal and interest capitalisation during the construction period.

A sum of Rs100 crore has been earmarked for the purpose of the scheme, the NHB has said.

Based on the feedback received from beneficiary institutions, NHB would also be willing to consider modifications in the scheme, said the release.
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Rs.7,000 crore gilts auction slated for Jan. 4, 2005
Mumbai: The Government of India has announced auction of government securities for a notified amount of Rs7,000 crore on January 4, 2005.

Government stock 9.39 per cent 2011 will be issued for a notified amount of Rs5,000 crore while the 7.50 per cent 2034 paper will be issued for a notified amount of Rs2,000 crore. A price-based auction of two papers will take place using multiple price method.

Up to 5 per cent of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the scheme for non-competitive bidding facility, said an RBI release.

Result of the auctions will be announced on January 4 while payment by successful bidders will be on January 5.

The Reserve Bank of India also said it plans to sell treasury bills worth Rs26,500 crore under the Market Stabilisation Scheme (MSS) in the January to March quarter, 2005. The central bank plans to sell 91-day and 364-day t-bills under the MSS, said the release.
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RBI: Power bonds may be traded
Mumbai: The Reserve Bank of India has allowed trading in Power Bonds that mature in October 2008 and April 2009.

The bonds were issued to Central utilities NTPC, NHPC, PowerGrid, Coal India and Neyveli Lignite by more than twenty State Governments against Rs45,000 crore owed to them by their electricity boards.

A committee headed by Montek Singh Ahluwalia had in 2001, suggested issuing the bonds as a solution to the financial problems of state electricity boards (SEBs). The Centre guaranteed the bonds on a promise from the states to reform the loss-making boards. It signed a three-way agreement with 27 states and the RBI for a one-time settlement of SEBs' dues in exchange for bonds for the utilities. It was then agreed that the bonds would be released for trading in a phased manner.

The tax-free, 15-year bonds carry an interest rate of 8.5 per cent, very attractive in today's low interest rate regime.
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